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y Notation:

P : Number of products p = [1,2,«««.,P].

T : Number of planning intervals t =[1,«, X,«,T].

Reg : Regular time

Over : Over time

y Parameters:-

Dem

pt

: Demand of product p during interval t (number of units).

Cap

reg

: Production capacity of product p at regular time Reg (number of units).

Cap

over

: Production capacity of product p at over time Over (number of units).

Inv : inventory capacity (number of units).

C

Mp

: Batch raw material cost of product p.

C

Rp

: Batch production cost of product p at regular time Reg.

C

Op

: Batch production cost of product p at over time Over.

H

p

: Unit inventory cost of product p during one interval.

b

p

: Unit back order cost of product p during one interval.

S

P

: Unit Selling price of product p during one interval.

n

pt

: batch size of certain product p

R : target sales income

y Decision variables

Qreg

pt

: Number of batches of product p during the planning interval t at

regular working time Reg.

Qover

pt

: Number of batches of product p during the planning interval t at

over time Over.

Qdel

pt

: Number of units delivered of product p at the end of interval t.

Qhold

pt

: Number of units stored of product p at the end of interval t.

P[

Qshort

pt

: Number of shortage units of product p at the end of interval t.

The objective function of the model:

ࢠ ࢠ ൌ ۱

୮

n

୮

௧ୀ்

௧ୀଵ

ୀ

ୀଵ

ቀۿ

୰ୣ

౦౪

ۿ

୭୴ୣ୰

౦౪

ቁ

۱

ୖ୮

n

୮

ۿ

୰ୣ

౦౪

௧ୀ்

௧ୀଵ

ୀ

ୀଵ

۱

୮

n

୮

ۿ

୭୴ୣ୰

౦౪

௧ୀ்

௧ୀଵ

ୀ

ୀଵ

B

୮

ۿ

୦୭୪ୢ

౦౪

௧ୀ்

௧ୀଵ

ୀ

ୀଵ

܊

୮

ۿ

shoit

౦౪

௧ୀ்

௧ୀଵ

ୀ

ୀଵ

The objective function minimizes the total cost. The total cost includes the direct cost and

indirect cost of the product during the planning horizon (multiple planning intervals). Direct

cost (prime cost) is direct material cost and direct production cost. Indirect cost (overheads)

is manufacturing cost, commercial cost and other costs. Manufacturing cost includes indirect

material cost such as holding, handling, maintenance«etc. commercial cost includes

administration cost, marketing cost,«etc.

Total cost = raw material cost + regular production cost + over time production cost +

inventory holding cost + shortage cost + other overheads

The objective function consists of the following elements:

y Raw material cost

This is the cost of raw material of products at the facility during all planning intervals.

۱

୮

n

୮

௧ୀ்

௧ୀଵ

ୀ

ୀଵ

ቀۿ

୰ୣ

౦౪

ۿ

୭୴ୣ୰

౦౪

ቁ

It is the product of unit raw material cost of product p (۱

୮

) and the summation of Number

of batches of product p during the planning interval t (ۿ

୰ୣ

౦౪

) at regular working time Reg,

and Number of batches of product p during the planning interval t (ۿ

୭୴ୣ୰

౦౪

) at over time

Over.

y regular production cost

This is the cost of production of product p at regular time (Reg) during all planning

intervals. It includes labor cost, machine utility cost, and all other variable costs involved at

the facility at regular time (Reg).

۱

ୖ୮

n

୮

ۿ

୰ୣ

౦౪

௧ୀ்

௧ୀଵ

ୀ

ୀଵ

It is the product of the batch production cost of product p (۱

ୖ୮

) at regular time Reg, and

summation of Number of batches of product p during the planning interval t (ۿ

୰ୣ

౦౪

) at

regular working time Reg.

y over time production cost

This is the cost of production of product p at over time (Over) during all planning intervals.

It includes labor cost, machine utility cost, and all other variable costs involved at the facility

at over time (over).

۱

୮

n

୮

ۿ

୭୴ୣ୰

౦౪

௧ୀ்

௧ୀଵ

ୀ

ୀଵ

It is the product of the batch production cost of product p (۱

୮

) at over time over, and

summation of Number of batches of product p during the planning interval t (ۿ

୭୴ୣ୰

౦౪

) at over

time Over.

y Holding cost

The holding inventory cost of the products over a time interval t.

B

୮

ۿ

୦୭୪ୢ

౦౪

௧ୀ்

௧ୀଵ

ୀ

ୀଵ

ۿ

holu

ౌ౪

ൌ ሾn

p

ۿieg

pt

n

p

ۿovei

pt

୲ୀத

୲ୀଵ

ሿ െ ۿ

ୢୣ୪

౦౪

୲ୀத

୲ୀଵ

p t

It is the product of unit inventory cost of product p during one interval (B

୮

) and summation

number of units stored (ۿ

୦୭୪ୢ

౦౪

) of product p at the end of interval t. where number of units

stored (ۿ

୦୭୪ୢ

౦౪

) of product p at interval ɒ is the difference of summation of number of

produced product (during regular time and overtime) and summation of number of units

delivered of productሺۿ

ୢୣ୪

౦౪

ሻ p at the end of interval t.

by assuming that the beginning inventory is equal to zero, then we can say that if

X=1

(Q reg

1st

+Qover

1st

)- Qdel

1st

= Qhold

1st

X ൌ

(Q reg

1st+2nd

+Qover

1st+2nd

)- Qdel

1st+2nd

= Qhold

2nd

X=3

(Q reg

1st+2nd+3rd

+Qover

1st+2nd+3rd

)- Qdel

1st+2nd+3rd

= Qhold

3rd

y Shortage cost

This is the penalty cost paid due to unsatisfying full customers¶ demand at each planning

interval.

܊

୮

ۿ

shoit

౦౪

௧ୀ்

௧ୀଵ

ୀ

ୀଵ

ۿ

shoit

ౌ౪

ൌ uem

୮୲

୲ୀத

୲ୀଵ

െۿ

ୢୣ୪

౦౪

୲ୀத

୲ୀଵ

p

It is the product of unit backorder cost of product p during one interval (b

p

) and summation

of number of shortage units of product p (Qshort

pt

) at the end of interval t . where number

of shortage units of product p (ۿ

shoit

ౌ౪

) is the difference of summation demand ሺuem

୮୲

ሻof

product p during interval t and number of units delivered of productሺۿ

ୢୣ୪

౦౪

ሻ p at the end of

interval t.

Model constraints

The previous objective function is subject to the following constraints.

y Income constraint:-

܁

୮

୮ୀ

୮ୀଵ

ۿ

ୢୣ୪

౦౪

R t

This constraint is for the target income. This constraint ensures that the income from all

products during interval t must be larger than or equal target R.

The income is the product of unit selling price of product p during one interval (S

P

) and

number of units delivered (Qdel

pt

) of product p at the end of interval t.

y Regular Capacity constraint :-

n

p

Qregp

t

ч Cap

reg

P,t

This constraint is for the regular capacity at each planning interval t of certain product p.

This constraint ensures that the product of number of batches (Qreg

pt

) of product p during

the planning interval t at regular working time Reg and batch size (n) of certain product p

does not exceed Production capacity(Cap

reg

)of product p at regular time Reg

y overtime Capacity constraint:-

n

pt

Qoverp

t

ч Cap

over

P,t

This constraint is for the overtime capacity at each planning interval t and certain product p.

This constraint ensures that the product of number of batches (Qover

pt

) of product p during

the planning interval t at overtime over and batch size (n

p

) of certain product p does not

exceed Production capacity (Cap

over

) of product p at overtime over

y Inventory capacity constraint:-

This constraint is for the capacity of inventory.

ۿ

୦୭୪ୢ

౦౪

Inv

୮ୀ

୮ୀଵ

t

This constraint ensure that the summation amount stored in the inventory ሺۿ

୦୭୪ୢ

౦౪

ሻ for all

products at each planning interval t does not exceed the inventory capacity Inv

y Demand constraint:-

There are two demand constraints.

-The first for customer that will not to be delivered exceed his demand .

Qdel

pt

Dem

pt

P,t

This constraint is to ensure that the number of units delivered (Qdel

pt

) of product p at the

each interval t does not exceed the demand ሺuem

୮୲

ሻof each product p during each interval t.

-The second for production quantity which must be more than or equal demand required.

Dem

pt

ч (n

p

Qreg

pt

+ n

p

Qover

pt

) P,t

This constraint is to ensure that the demand ሺuem

୮୲

ሻof each product p during each

interval t does not exceed the quantity produced during regular time and overtime.

y Quantity delivered constraint:-

This constraint is for the quantity delivered.

ۿ

ୢୣ୪

౦౪

ቀn

୮

ۿ

୰ୣ

౦౪

n

୮

ۿ

୭୴ୣ୰

౦౪

ቁ ۿ

୦୭୪ୢ

౦ሺ౪షభሻ

୲ୀத

୲ୀଵ

pǡ t

such that

Qdel

pt

Ň

t=0

= 0

This constraint is to ensure that the number of units delivered (Qdel

pt

) of product p at the

end of interval t does not exceed the sum of quantity produced during regular time and

overtime and summation amount stored in the inventory ሺۿ

୦୭୪ୢ

౦ሺ౪షభሻ

ሻ for each product at

each previous planning interval t-1.

y Minimum quantity constraint

This constraint is for the minimum quantity produced for each product.

(n

pt

Qreg

pt

+ n

pt

Qover

pt

) k

pt

P,t

This constraint is to ensure that sum of quantity produced during regular time and overtime

is more than or equal minimum size produced (k

pt

)of product p during interval t.

y Non negativity and integrity constraints :-

Qreg

pt

, Qover

pt

, Qhold

pt

, Qdel

pt

, Qshort

pt

0 & integer pt

All of decision variables must be more than or equal to zero and integer.

: Number of shortage units of product p at the end of interval t. : Number of batches of product p during the planning interval t at over time Over. : Number of units stored of product p at the end of interval t. Qshortpt . : Number of units delivered of product p at the end of interval t.y Decision variables Qregpt Qoverpt Qdelpt Qholdpt P [ : Number of batches of product p during the planning interval t at regular working time Reg.

Indirect cost (overheads) is manufacturing cost. The total cost includes the direct cost and indirect cost of the product during the planning horizon (multiple planning intervals).«etc. handling. maintenance«etc. Direct cost (prime cost) is direct material cost and direct production cost. Manufacturing cost includes indirect material cost such as holding. commercial cost and other costs. marketing cost.The objective function of the model: The objective function minimizes the total cost. Total cost = raw material cost + regular production cost + over time production cost + inventory holding cost + shortage cost + other overheads The objective function consists of the following elements: . commercial cost includes administration cost.

It is the product of unit raw material cost of product p ( of batches of product p during the planning interval t ( ) and the summation of Number ) at regular working time Reg. y regular production cost This is the cost of production of product p at regular time (Reg) during all planning intervals. ) at over time and Number of batches of product p during the planning interval t ( Over. ) at regular time Reg. machine utility cost. and ) at summation of Number of batches of product p during the planning interval t ( .y Raw material cost This is the cost of raw material of products at the facility during all planning intervals. It is the product of the batch production cost of product p ( regular working time Reg. It includes labor cost. and all other variable costs involved at the facility at regular time (Reg).

where number of units is the difference of summation of number of ) of product p at interval produced product (during regular time and overtime) and summation of number of units delivered of product p at the end of interval t. machine utility cost. and all other variable costs involved at the facility at over time (over). It includes labor cost.y over time production cost This is the cost of production of product p at over time (Over) during all planning intervals. ) at over time over. and ) at over summation of Number of batches of product p during the planning interval t ( y Holding cost The holding inventory cost of the products over a time interval t. It is the product of unit inventory cost of product p during one interval ( ) and summation number of units stored ( stored ( ) of product p at the end of interval t. It is the product of the batch production cost of product p ( time Over. .

) is the difference of summation demand of product p during interval t and number of units delivered of product p at the end of .by assuming that the beginning inventory is equal to zero. It is the product of unit backorder cost of product p during one interval (bp) and summation of number of shortage units of product p (Qshortpt ) at the end of interval t .Qdel1st+2nd = Qhold2nd (Q reg 1st+2nd+3rd +Qover1st+2nd+3rd). where number of shortage units of product p ( interval t.Qdel1st+2nd+3rd = Qhold3rd y Shortage cost This is the penalty cost paid due to unsatisfying full customers¶ demand at each planning interval.Qdel1st = Qhold1st (Q reg 1st+2nd +Qover1st+2nd). then we can say that if X=1 X X=3 (Q reg 1st +Qover1st).

y Income constraint:- This constraint is for the target income.t This constraint is for the regular capacity at each planning interval t of certain product p. y Regular Capacity constraint :- np Qregpt Capreg P. This constraint ensures that the income from all products during interval t must be larger than or equal target R. This constraint ensures that the product of number of batches (Qregpt) of product p during the planning interval t at regular working time Reg and batch size (n) of certain product p does not exceed Production capacity(Capreg)of product p at regular time Reg . The income is the product of unit selling price of product p during one interval (SP) and number of units delivered (Qdelpt) of product p at the end of interval t.Model constraints The previous objective function is subject to the following constraints.

y overtime Capacity constraint:- npt Qoverpt Capover P. .t This constraint is for the overtime capacity at each planning interval t and certain product p. This constraint ensures that the product of number of batches (Qoverpt) of product p during the planning interval t at overtime over and batch size (np) of certain product p does not exceed Production capacity (Capover) of product p at overtime over y Inventory capacity constraint:This constraint is for the capacity of inventory.

This constraint ensure that the summation amount stored in the inventory products at each planning interval t does not exceed the inventory capacity .

for all .

t of each product p during each This constraint is to ensure that the demand interval t does not exceed the quantity produced during regular time and overtime. . Qdelpt Dempt P. each interval t does not exceed the demand This constraint is to ensure that the number of units delivered (Qdelpt) of product p at the -The second for production quantity which must be more than or equal demand required. -The first for customer that will not to be delivered exceed his demand . Dempt (np Qregpt+ np Qoverpt) P.t of each product p during each interval t.y Demand constraint:There are two demand constraints.

Qshortpt 0 & integer pt All of decision variables must be more than or equal to zero and integer. (npt Qregpt + npt Qoverpt ) kpt P. Qoverpt . Qdelpt . y Non negativity and integrity constraints :- Qregpt . Qholdpt . . for each product at y Minimum quantity constraint This constraint is for the minimum quantity produced for each product.y Quantity delivered constraint:This constraint is for the quantity delivered. such that Qdelpt t=0 = 0 This constraint is to ensure that the number of units delivered (Qdelpt) of product p at the end of interval t does not exceed the sum of quantity produced during regular time and overtime and summation amount stored in the inventory each previous planning interval t-1.t This constraint is to ensure that sum of quantity produced during regular time and overtime is more than or equal minimum size produced (kpt )of product p during interval t.

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